Economics Answers

Monopolistic Competiton
Compare and contrast the competition for one of the following by selecting five firms in the industry:
a) fast food restaurants (Choose this)
b) hotels/motels
c) dress stores
How are the firms similar to and how are they different from other firms in the industry? Explain why competing businesses frequently locate in close proximity. How can a business keep track of the competition in the community?

Based on the table below
Quantity Price Total Cost
1 60 18
2 58 20
3 54 24
4 48 30
5 40 38
6 28 50
7 14 70

i. Calculate MC and MR
ii. Determine the quantity produced by the firm
iii. How much does the firm earn in terms
iv. What is the average cost of the firm?
v. Sketch the AC, AR, MR and MC curve without a scale.

In 30 years, you plan to set up a fellowship fund for your university that pays out $100,000/year in perpetuity with an annually compounded discount rate of 5%. In order to set up the fund in 30 years, how much do you need to save each year (starting this year) assuming you can get a semi-annually compounded return of 10% on your savings for the next 30 years?

When you receive a declaration, how long do you get to send the form to the ATO? What happens if you fail to do so?

How would you describe period- end adjustments and which aspects of the business activity can be highlighted in it? Provide examples.

The economy is at full employment and an election is coming up. To make sure they’re all re-elected, various officials decide to increase government spending by $100 billion. Senator Graham says the money should be spent on improving education and transport systems. Senator Dole proposes building several very large Coast Guard training facilities in states that currently have none, including Kentucky, Nebraska, Nevada, and Arkansas.
a. What is the major difference between the spending plans of Senator Graham and Senator Dole?

3. Everyone loves a tax cut. How will the short-run effects of a tax cut on the price level and on unemployment differ if the economy is in a recession from the effects if the economy is at full employment? (Hint: Examine the slope of the AS curve.)

Apply your knowledge of the AD/AS model to predict the effect on economic variables (i.e., P, RGDP, interest rates, wages, savings and spending) of some events on the U.S. economy. Diagram the effect of the following events. Be sure to explain the effects in the short run and effects in the long run for each question, in words. To keep things clear, assume that in each case the economy starts out at long-run equilibrium.
d. Suddenly, foreign countries sell great quantities of important inputs such as steel and computer chips at very low prices in this country. Hint: the long-run effect will depend on whether the price decrease is permanent or not.

Apply your knowledge of the AD/AS model to predict the effect on economic variables (i.e., P, RGDP, interest rates, wages, savings and spending) of some events on the U.S. economy. Diagram the effect of the following events. Be sure to explain the effects in the short run and effects in the long run for each question, in words. To keep things clear, assume that in each case the economy starts out at long-run equilibrium.
c. The government increases both taxes and spending by $500 billion. The money is spent domestically. Hint: Be sure to provide a strict interpretation of the AD/AS model as part of your answer.

Write a factor that may increase the value of education.